Research Project: CRM and Customer Satisfaction in Australian Retail

This research project investigates the effectiveness of Customer Relationship Management (CRM) in enhancing customer satisfaction within the Australian retail industry. The study explores the implementation of CRM systems, examining their impact on customer experience, business focus, and acquisition of new customers. The paper addresses key research questions, including the increasing attention CRM receives, the relationship between CRM and customer satisfaction, and CRM's overall effect on customer satisfaction. The literature review covers various aspects of CRM, including analytical and behavioral CRM, and highlights the importance of customer satisfaction and loyalty. The research draws on previous studies that explore the relationship between CRM, customer satisfaction, customer loyalty, and word-of-mouth, providing insights into the mechanisms that influence customer behavior. The study emphasizes the challenges faced by Australian retail businesses due to technological advancements, globalization, and increased competition, concluding that effective CRM strategies are essential for achieving high customer satisfaction and building lasting relationships.

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Research Project
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Introduction
In the current competitive environment, there is a need for organizations to view their
customers in a different perspective. Customer Relationship Management (CRM) is a group of
strategic measures, covering different organizational concepts and functions such as operational,
analytical framework, and collaborative. By implementing the customer relationship
management systems, an organization could derive various benefits such as improved customer
experience, leads to a focused business, acquiring new customers, it is cost-effective and is
efficient in reputation management. The business operations’ changing dynamics across the
world is characterized by extreme competitions, many luxury choices, educated and demanding
clients, government acts, and an unsettled socio-economic environment. These current changes
have resulted in the adoption of modern marketing practices from the traditional practices by the
producers. Essentially, customers are emerging to be the most essential stakeholders at the core
of every venture. The customers’ potential of obtaining anything they want at any given time,
from any person and any place has led to the disregard of the traditional marketing practices.
Businesses are being forced by global dynamics and globalization to re-evaluate their strategies.
The survival rate of any business has been greatly influenced by customers’ satisfaction. Despite
that Customer Relationship Management influences business performance, it as well has an
effect on the customers. Specifically, this paper addresses the CRM’s effectiveness in assisting
Australian retail ventures to achieve customer satisfaction.
Today, firms have recognized the essentiality of customers as they grow and enhance
customers’ strong interactive relationships. There is the possibility of short-term and long-term
strategies of an organization to be altered by these relationships. It is essential for an organization

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to be aware of the customers’ desires and expectations and conduct an environmental
investigation, particularly the industry and task environment. This is important in coming up
with new quality services that are offered to customers and attracts new customers
(Chuang&Lin, 2013). To a high extent, there are numerous challenges facing the Australian
retail businesses that emanate from development in technology, globalization as well as
increased competitiveness. All these have immensely affected the retail businesses’ marketing
strategies, with the aim of becoming more effective in meeting the problems. As an inevitable
outcome, businesses have become aware that attaining high quality is not only based on the
product or a service, its properties but as well on the products’ end-user.
Hence, it is important for organizations to focus on the customers since they are the
essential elements of a business. Firms should have an understanding of the customers’ needs,
perception, and desires by use of CRM. Basically, this is largely based on the knowledge as well
as the manner of integrating them into customer relationship management’s philosophy. An
organization is faced with the challenge of attracting new clients while at the same time
satisfying and meeting their current customers’ needs (Peltier, Zahay & Lehmann, 2013).
Therefore, Customer Relationship Management systems are highly recommended for an
organization since it facilitates data and information collection pertaining current clients and new
potential clients. Nonetheless, it facilitates easy access and surfing by clients and the top
management in solving challenges efficiently as well as enabling businesses to grow thus
increasing the revenue. Hence, in understanding CRM’s effects on customer satisfaction in the
retail industry in Australia, the following questions are addressed:
1. Does CRM achieve increased attention in Australian retail industry?

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2. What relationship exists between CRM and customer satisfaction in the Australian
retail industry?
3. Does CRM have an effect on customer satisfaction in the Australian retail industry?
Based on this research, a hypothesis has been set:
Ho: there exists no significant effect of CRM on customer satisfaction in Australian retail
industry.
Literature Review
Customer Relationship Management assists in building long-lasting relationships, giving
firms the joy of retained clients. Customer Relationship Management involves obtaining
satisfaction and trust, which translates to the success of any organization. The entire CRM’s
process is aided by the use of computer programs. Customer Relationship Management is made
of two essential types, the Analytical and Behavioural CRM. The Analytical Customer
Relationship Management gathers and analyses the existing customer data (Charoensukmongkol
& Sasatanun, 2017). Also, the Behavioural CRM is based upon service’s interaction
psychological underpinning as well as the managerial structures and uses experiments and
surveys for efficient CRM. A simple analysis of clients’ satisfaction is essential in determining
an organization’s performance. Hence, any firm that implementing Customer Relationship
Management, a system should be put in place to check on CRM’s performance. Customer
Relationship Management practices facilitate increased customer base. This is because it is an
excellent tool for gathering information, and for developing strategies pertaining to new
products. Some research indicates that customers tend to rank more the services offered in banks

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that practice Customer Relationship Management than the banks that do not practice CRM. This
illustrates that CRM possess a direct influence on customers’ satisfaction and favourable ratings
and a lot more to explore.
Ejaz, Ahmed & Ahmad (2013) suggests that CRM’s effects on customer satisfaction can
only be achieved if there is enhanced integration of knowledge management capabilities and
information technology. The CRM’s success is dependent on efficient management and
actualization of the customers’ acquired knowledge. Ejaz, Ahmed & Ahmad, (2013) sort to
understand the relationship that exists between CRM and various customer behaviours which
include customer satisfaction, word of mouth, clients loyalty, and customer behaviours. The
population used for the study was the Fast Food Restaurants’ customers. The target population
was the Fast Food customers from six distinct outlets of well-known food chains in two primary
cities, Labore and Islamabad. The research indicates that CRM has a direct relationship to the
level of client satisfaction as well as the expectations of the client. The expectations of the
customers as well were observed to be associated with the loyalty and satisfaction of the
customers (Choudhury & Harrigan, 2014). Nonetheless, customers’ expectations did not have a
direct relationship to the word of mouth. This indicates that client’s experience does not
influence the customers to instantly speak positively regarding the firm. Continuous customer
experience enables customers to develop a positive attitude towards the company and feel
satisfied when using the organization’s products. The research further shows that clients are not
bothered by one time good experience. Rather, they make use of the goods for some time and
after being positively exposed for a number of time, they become satisfied and gain loyalty to the
firm.

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In their model, Ejaz, Ahmed and Ahmad present another relationship that appeared to be
rational and logical but was not found being present later in their model. This is the
associationbetween client satisfaction and word of mouth. Of the four variable aimed to be
researched on, only three variable; CRM, client satisfaction, and client experience did not have a
direct relationship to the word of mouth. The final model indicated that a direct relationship
existed between customer loyalty and word of mouth (Fayerman, 2002). The model reveals that
Customer Relationship Management practices do not have a direct relationship to the word of
mouth (Ejaz, Ahmed & Ahmad, 2013). However, the model indicates that CRM has impacts on
customer satisfaction and improves customer experience’s value. Customer experience as well
has an impact on customer satisfaction and both, contain a direct relationship to customer
loyalty. In turn, customer loyalty has an impact on the word of mouth. Findings of this research
provide insights into a mechanism that affects the customer behaviour. The outcomes of the
research are consistent with other researchers indicating that Customer Relationship
Management has no direct relationship to customer loyalty (Zali & Heydarian, 2012).
Concurrently, the research did not identify any direct relationship of Customer Relationship
Management to word of mouth. Similarly, the research failed to note if any relationship exists
between customer satisfaction and experience with CRM. However, the research identified a
direct interaction between CRM with client satisfaction and experience (Demo,
Watanabe,Chauvet & Rozzett, 2017). Since most of the customers at these restaurants are urban
citizens, dining at these restaurants has become part of their life and they no longer view it as a
luxurious thing. Hence, Customer Relationship Management practices do not make these
customers loyal or get them to speak about the restaurants. Rather, the CRM practices avail the
customers with a good and memorable experience and make them satisfied.

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Additionally, Shaon and Rahman seek to review whether CRM has any effectson
customer loyalty and their level of satisfaction. In their work, they identified several Customer
Relationship Management factors that directly are directly linked to customer satisfaction and
customer loyalty. These factors include reliability, customer retention, customization, customer
attraction, customer orientation, responsiveness, Information Technology, and commitment. The
study demonstrates that of a close connection that exist between CRM with client satisfaction as
well asclient loyalty (Elmuti, Jia & Gray, 2009). Also, a relationship exists between client loyalty
as well as client satisfaction. Generally, the CRM factors tend to have an essential influence on
client loyalty and client satisfaction (Shaon & Rahman, 2015). The research identifies CRM’s
components are made up of a CRM process as well as interconnections among CRM, client
loyalty, and satisfaction. By effectively implementing CRM practices, the authors note that there
can be a lot of benefits reaped from this. Client satisfaction is affected by the quality of the
products; thus implementing CRM would enhance customer satisfaction (Harrigan & Miles,
2014). Also, customer loyalty is influenced by the service’s quality; hence implementing an
effective CRM would improve customer loyalty. Nonetheless, client satisfaction has a direct
connection with client loyalty. Hence, satisfied customers tend to remain repeat customers.
The authors note that satisfied customers usually connect with a service provider.
Additionally, Shaon & Rahman, (2015) argue that Customer Relationship Management ensures
customer satisfaction. To achieve the intended customer’s satisfaction level, there should be a
proactive corporate responsiveness to allow access, build, and retain sustain clients for
sustainable market advantage. CRM impacts possess a direct effect on the satisfaction of the
clients. Thus, a company that practices effective CRM strategies has an assurance of increased

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customer satisfaction (Iriana & Buttle, 2006). Lack of an efficient CRM strategy will lead to
decreased customer satisfaction. Through the use of modern communication technologies, it is
easy for CRM to effectively communicate with the clients while at the same time meeting their
expectations. Meeting customers’ expectations assists in enhancing customer satisfaction. The
study as well contains various managerial implications. Organizations that implement the
Customer Relationship Management application are supposed to have an understanding of the
different conditions under which the deployment of the CRM’s applications enhance customer
satisfaction and loyalty (Jain, Dalela & Tiwari, 2009). The result from the research demonstrates
benefits of integrating client satisfaction and customer loyalty in realizing benefits from applying
Customer Relationship Management. The results are essential to the managers that are currently
actualising CRM. Organizations that have enhanced interaction with their clients have an
increased opportunity of benefiting from the application of CRM, regarding the customer
satisfaction and customer loyalty. The study as well indicates that despite implementing CRM, it
is necessary for managers to institute measurement systems that will effectively capture customer
knowledge gains resulting from implementation of the Customer Relationship Management
applications (Long, Khalafinezhad, Ismail & Rasid, 2013). This is because customer loyalty’s
gains are a precursor to customer satisfaction’s gains.
Nonetheless, Yaghoubi, Asgari & Javadi (2017) carried a research to understand CRM’s
effects on the productivity of companies, client satisfaction, and trust by applying structural
equation model. They based their research on hospitals located in Iran. The study population of
this study was the nurses from few selected hospitals in Isfaham. The results of the study
indicated that CRM’s effects were high on customer satisfaction, loyalty, and trust. The existence

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of CRM helps in reducing the gap that exists between customers and organizations, thus leading
to the success of the firms by improving customer loyalty (Trainor, Andzulis, Rapp & Agnihotri,
2014). However, the existence of the patient complaint management in these hospitals has been
termed as being among the contributing factors, and it has had the highest effect. The results
from this study indicate that among CRM’s tasks, services’ diversity has had the most impact.
The most essential mechanisms to increase services’ diversity include; availing services based on
the patients’ needs and expectations, as well as the existence of existing and new services
(Yaghoubi, Asgari & Javadi, 2017). Essentially, CRM is an organizational strategy which is
designed depending on the needs of the clients, thus enhancing communication between an
organization and the customers. This results in increased opportunities for the firm to offer
additional products and services to the clients. The other element that had an effect on this
research is the customer interaction, which is a CRM’s function. Treating the medical staff and
the patients well and holding conversations with the patients outside the hospitals’ vicinity are
among the effective strategies that helped enhance interaction with the patients.
Nonetheless, the CRM’s functions were adversely influenced by identifying and
prioritizing customers. The clients who were likely to cut their relationship with the organization
were identified and measures put in place to enhance their loyalty. In the area of customer
satisfaction, the research has considered the existence of patient’s complaints management in the
hospitals as well as measuring the level of customer satisfaction (Khodakarami & Chan, 2014).
An examination has been done on customer satisfaction, the perceived quality, customer
expectation, customer loyalty, complaints, and the functions of CRM. There was little impact on
the customer loyalty and trust where patients preferred services from other hospitals if the

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conditions are better. This indicates that if the considered conditions are of high standards in the
other hospitals, the patients tend to be loyal and trust exists between these hospitals and the
patients. Also, the results indicate that there was a significant impact of financial constraints and
problems and issues regarding the patients and other customers with the medical staff. Among
the primary effects of CRM in the research was on customer satisfaction and productivity.
According to Yaghoubi, Asgari & Javadi, (2017), organizations can obtain seven main
productive benefits through the adoption of CRM, such as efficiency and effectiveness. They
also point out that customer loyalty, customer satisfaction, and enhanced productivity are as a
result of Customer Relationship management. Thus, CRM should be an imperative tool for every
organization because if it is effectively implemented, it may result to enhanced customer
satisfaction, loyalty, and attracting potential customers, resulting to increased sales and repeated
purchases.
Also, Mensah (2016)reviews the CRM’s effects on client satisfaction and client loyalty.
To do this, the author retrieved necessary documents form the online databases, providing a
comprehensive reference on CRM’s influence on client satisfaction and loyalty. In evaluating
more than 35 articles, it was clear to the researcher that Customer Relationship Management had
become an area of interest due to its relative novelty and exploding development (Komunda &
Osarenkhoe, 2012). The result indicated that CRM had been conceptualized in three primary
dimensions namely; SQ which is the customers’ attitude and opinion on the presented excellence
of the service by the service provider. SQ’s essentiality is to avail the customers’ needs. It is
observed that if the experience of the customers exceeds their expectations, they are more likely
to return and transact more business with the service provider. Conversely, reduced service

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quality results to customers becoming inclined to defect to other service providers since they are
not obtaining what they desire. The second dimension of this study is the SA which refers to the
timely accessibility of products to clients. Enhancing the accessibility of products by the
customer results to improved customer satisfaction (Mensah, 2016). The results of the study
reveal that SA has been conceptualized by service’s development, service’s provider geographic
location, and application of remote systems in availing the services. The author notes that most
studies that made use of the SA as their independent variable indicated existence of a direct
correlation between client satisfaction and loyalty (Dhingra & Dhingra, 2013). The third
dimension is the HC whereby organizations are entitled to deal with customers’ dissatisfaction.
They are then to improve on procedures to help solve customer problems, which would result in
nurturing customer satisfaction and loyalty. The outcome of the research shows that HC has a
primary effect on the customer satisfaction and loyalty.
Mensah (2016) also notes that CRM is a complex phenomenon and only its primary
measures that influence client satisfaction and client loyalty are used in the study. To achieve a
competitive advantage and improved organizational performance, there is a need for continuous
improvement to attain increased customer satisfaction and loyalty (Mohammed & Rashid, 2012).
Based on this study, Customer Relationship Management has been conceptualized into three
primary dimensions, which include, SQ, SA, and HC. In most of the studies used in this research,
the three dimensions are observed as having noteworthy influence on client satisfaction and
client loyalty.
Significantly, Al-Qeed, ALsadi & Al-Azzam (2017) seek to understand the roles played
by CRM in achieving client satisfaction in Jordan’s banking sector. The research mainly focused

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on Jordan banks. The outcome form this research revealed that degree of importance given to
CRM was average while the degree of essentiality towards banking quality of the services was
high. Nonetheless, the researchstipulated a direct correlation between CRM and the banking
services’ quality (Al-Qeed, ALsadi & Al-Azzam, 2017). However, the results indicated a
negative relationship between CRM’s client loyalty and client satisfaction and quality of the
banking services. This was contrary to the expectations of the research whereby the researcher
aimed to identify if there was a relationship between customer satisfaction and loyalty with the
quality of the services offered. In this case, the rule is that service quality is perceived to be
essential to the firm and the customer, and thus would translate to increased client satisfaction
and client loyalty to an organization and the services offered (Baumann, Elliott & Burton, 2012).
Notwithstanding, many studies that have been conducted reveal that there is a direct relationship
between Customer Relationship Management and organizational performance, customer
satisfaction, customer loyalty, and customer perception (Nazir, Khan,Jamil & Mehmood, 2014).
However, results from this study reveal that there is a statistically significant effect of CRM’s
dimensions which include client satisfaction and client loyalty.
Finally, results from the research show that the influential dimensions of the research
were customer culture, customer, retention, and knowledge. They were followed by client value,
client loyalty, and the client satisfaction (Hsieh, Rai, Petter & Zhang, 2012). According to the
authors, customer knowledge has become essential whereby growth and development in this era
of technology have made clients to be aware than before of their needs. This has resulted in a
challenge in satisfying these needs in terms of the provided products and services. The study
reveals that there is a desire for firms to emphasize more on customer relation, with an aim of